INM believes closure of the paper, because of its publication of topless pictures of the Duchess of Cambridge, is "disproportionate", reports the Irish Times.

Though the Dublin-based publisher said the matter warranted "immediate investigation", which is under way, it believed termination of the title would be "disproportionate to a poor editorial decision". It would result in the loss of up to 120 jobs.

That decision to publish the pictures, which was apparently taken by the editor Mike O'Kane, was reported to have been made without reference to the senior managements of either INM or N&S.

The Irish Daily Star is a joint venture dating back to 1987, 13 years before N&S acquired control of Express Newspapers, publisher of the Daily Star titles.

INM was then run by Tony O'Reilly, who was succeeded by his son, Gavin. But he departed earlier this year after media tycoon Denis O'Brien became the largest shareholder and insisted on changes at board level.

Since then, continuing company upheaval means that editors of INM titles have tended to operate without traditional management control or, in the words of one insider, any effective control whatsoever. Aside from budgets, there has been little editorial oversight.

The managing director of the division responsible for the Irish Daily Star is Ger Colleran, a former editor of the paper. He spoke to INM's Sunday Independent in support of the editor's decision, implying that he had been consulted by O'Kane prior to publication.

Colleran is quoted as saying: "What we do in the Irish Daily Star is to produce an Irish newspaper for an Irish audience. The photographs of images taken from the magazine were not printed in our Belfast edition and there were two reasons for that -- sensitivity to our British partners, Express Newspapers, and a slightly different legal regime."

He said he was "surprised about the furore... particularly in a British media that gave freedom of speech to the world and is rightly called the Mother of Parliaments, underwritten by freedom of expression and a free press."

The Irish Daily Star published reproductions of pages from French Closer magazine, which included 10 grainy shots of Prince William and his wife sunbathing on the balcony of a villa in Provence.

The Irish Daily Star operates in Dublin under INM's umbrella under a licence from NS that does not expire until 2037. The contract between the two companies allows each of them to give notice to the other of an intention to withdraw.

But to executive a sudden exit from the agreement is fraught with legal problems, not least the problems caused by making about 80 full-time staff redundant.

Aside from redundancy payments, Hancock also says there would be "significant costs incurred" in N&S terminating the printing contract with INM and the lease of its offices in Dublin.

That said, Desmond does hold a strong hand because N&S controls the trademark of the Star title and a great deal of sport, celebrity news and features material is supplied by the London-based Daily Star.

Both INM and N&S jointly agreed last year to stop publishing the Irish Daily Star on Sunday for financial reasons. But the daily title does make money.

According to the latest accounts for the division known as Independent Star Ltd, in 2010 it made a pretax profit of €4.3m (£3.5m) on turnover of €40.6m (£32.9m). Its profits declined by 11.4 per cent that year.

Though figures for 2011 have yet to be published, informed sources cited by Hancock estimate that the accounts would show a decline in profits of between 8 and 10%. In 2010, the company paid a dividend of €4.55m (£3.7m) jointly to INM and NS.

The Irish Daily Star sells about 70,000 copies a day in the Republic and has been losing circulation in line with the market.

Footnote: The code administered by the Irish Press Council states that "taking photographs of individuals in private places without their consent is not acceptable, unless justified by the public interest".

The Irish Daily Star signed up to that code when the council was set up in January 2008. At the time of writing, no complaint had been received.

A footnote to the footnote: I'm not quite sure what Ger Colleran means by his reference to "a slightly different legal regime" in Ireland as distinct from Britain. Both have incorporated the human rights convention into their laws.